China Construction Bank Corp reports 1.5% Net Income growth in 2016
29/03/2017 • About China Construction Bank Corp (
$939) • By InTwits
China Construction Bank Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Construction Bank Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 2.3%.
- The company has potentially unprofitable business model: ROIC is at 6.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Construction Bank Corp ($939) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 713,982 | 771,070 | 861,353 | 908,448 | 896,781 | -1.3% |
| Net Income | 193,179 | 214,657 | 227,830 | 228,145 | 231,460 | 1.5% |
Balance Sheet
|
|---|
| Cash | 2,458,069 | 2,475,001 | 2,610,781 | 2,401,544 | 2,849,261 | 18.6% |
| Short Term Debt | 1,104,024 | 927,169 | 1,297,736 | 1,803,155 | 2,374,880 | 31.7% |
| Long Term Debt | 161,768 | 163,791 | 191,349 | 244,748 | 252,546 | 3.2% |
Cash flow
|
|---|
| Capex | 34,939 | 38,406 | 35,490 | 28,589 | 27,742 | -3.0% |
Ratios
|
|---|
| Revenue growth | 23.5% | 8.0% | 11.7% | 5.5% | -1.3% | |
| Net Income Margin | 27.1% | 27.8% | 26.5% | 25.1% | 25.8% | 0.7% |
| CAPEX, % of revenue | 4.9% | 5.0% | 4.1% | 3.1% | 3.1% | -0.1% |
| ROIC | 11.1% | 11.7% | 10.8% | 8.4% | 6.9% | -1.5% |
| ROE | 22.0% | 21.4% | 19.7% | 17.2% | 15.6% | -1.6% |
China Construction Bank Corp ($939) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 260,269 | 208,820 | 213,128 | 357,065 | | | | |
| Net Income | 67,952 | 65,458 | 60,425 | 37,625 | | | | |
Balance Sheet
|
|---|
| Cash | 2,701,506 | 2,584,262 | 2,725,492 | 2,849,261 | | | | |
| Short Term Debt | 1,811,483 | 2,172,608 | 2,225,485 | 2,374,880 | | | | |
| Long Term Debt | 381,975 | 244,170 | 445,601 | 252,546 | | | | |
Ratios
|
|---|
| Net Income Margin | 26.1% | 31.3% | 28.4% | 10.5% | | | | |
Revenue and profitability
China Construction Bank Corp's Revenue decreased slightly on 1.3%.
Net Income marign increased slightly on 0.70 pp from 25.1% to 25.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 China Construction Bank Corp had CAPEX/Revenue of 3.1%. CAPEX/Revenue decreased slightly on 1.9 pp from 5.0% in 2013 to 3.1% in 2016. It's average level of CAPEX/Revenue for the last three years was 3.5%.
Return on investment
The company operates at good ROE (15.58%) while ROIC is low (6.91%). ROIC decreased slightly on 1.5 pp from 8.4% to 6.9% in 2016. ROE decreased slightly on 1.6 pp from 17.2% to 15.6% in 2016.
Leverage (Debt)
Debt surged on 28.3% while cash surged on 18.6%.
Appendix 1: Peers in Banks
Below we provide China Construction Bank Corp benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | | 43.4% | 6.8% | 116.4% | |
| Huishang Bank Corp Ltd ($3698) | | 22.8% | 24.3% | 24.6% | 17.3% |
| Shengjing Bank Co Ltd ($2066) | | 36.3% | 40.1% | 24.3% | 17.5% |
| Bank of Chongqing Co Ltd ($1963) | | 26.6% | 28.4% | 18.5% | |
| BOC Hong Kong Holdings Ltd ($2388) | 15.1% | 11.4% | -3.0% | 11.6% | |
| |
|---|
| Median (14 companies) | 36.7% | 12.1% | 23.6% | 4.8% | -3.3% |
|---|
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | 4.1% | 29.9% | 27.0% | 33.5% | |
| |
|---|
| Median (1 company) | 4.1% | 29.9% | 27.0% | 33.5% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dah Sing Banking Group Ltd ($2356) | 3.9% | 4.1% | 2.2% | 7.5% | |
| Dah Sing Financial Holdings Ltd ($440) | 3.0% | 3.4% | 1.7% | 5.9% | |
| Harbin Bank Co Ltd ($6138) | 19.8% | 9.9% | 6.5% | 5.8% | |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 4.0% | 4.3% | 4.8% | 4.4% | 2.0% |
| Shengjing Bank Co Ltd ($2066) | 1.6% | 2.2% | 5.0% | 3.0% | 2.3% |
| |
|---|
| Median (14 companies) | 2.6% | 2.9% | 1.8% | 2.5% | 1.8% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hang Seng Bank Ltd ($11) | 8.6% | 9.5% | 9.0% | 8.3% | 8.1% |
| Chong Hing Bank Ltd ($1111) | 5.5% | 5.2% | 16.4% | 5.7% | 5.6% |
| Chongqing Rural Commercial Bank Co Ltd ($3618) | 6.3% | 5.7% | 5.2% | 4.3% | 4.1% |
| Huishang Bank Corp Ltd ($3698) | 8.4% | 6.8% | 5.8% | 4.3% | 4.0% |
| Shengjing Bank Co Ltd ($2066) | 6.0% | 6.6% | 5.3% | 3.5% | 2.3% |
| |
|---|
| Median (12 companies) | 6.0% | 6.2% | 5.4% | 4.3% | 3.1% |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| KVB Kunlun Financial Group Ltd ($8077) | -66.3x | -7.1x | -10.6x | -5.7x | |
| |
|---|
| Median (1 company) | -66.3x | -7.1x | -10.6x | -5.7x | |
|---|
